Gray Areas in Part II of the Google vs. FTC Settlement: Patents

Search wasn’t the only thing coming into question in the FTC’s investigation of Google.

By Jessica E. Lessin and Shira Ovide

Google dodged having to make major changes to its search business, after the Federal Trade Commission cleared it of antitrust violations and preserved the status quo in Web search. But the industry implications of a second piece of the settlement – which relates to wonky mobile patents –is murkier.

Google agreed to limit the instances in which it would try to block competitors’ products based on patents related to wireless standards. These “standard essential patents,” which tend to cover communication capabilities as opposed to design or interface features, are a controversial topic in the tech world.

Microsoft and Apple, which has sued a number of phone makers that run Google’s Android operating system, have argued to regulators that Google-owned Motorola Mobility and Samsung Electronics shouldn’t be able to use those patents to try to block their products at all because owners agreed to license them on fair and reasonable terms. Google and Samsung, however, consider them valuable weapons in the escalating patent wars over mobile technology, which Apple and others provoked.

As part of the settlement, Google said in a blog post that it would try to resolve issues relating to those patents through a neutral third party before seeking injunctions.

Some lawyers following the case say the agreement could be good news for Apple and Microsoft given it is likely to limit the circumstances in which Google could seek injunctions.

But the fact that Google stops short of agreeing to never doing so makes it unlikely to placate its rivals, people familiar with the matter said.

The status of existing patent litigation involving Google may be another gray area. There are several ongoing patent suits between Google’s Motorola unit and Microsoft and Motorola and Apple, and in some of the cases Google is asking courts to block sales. Google could argue that it will follow through on its promise to the FTC by not obtaining an injunction until a third party – in this case a federal court judge – determines a fair and reasonable price for Microsoft to license Motorola’s patents. If Microsoft is still unwilling to pay up, Google could move ahead with an injunction.